New Smyrna may tighten zones for Internet cafes

Published: Wednesday, March 20, 2013 at 5:23 p.m.

Last Modified: Thursday, March 21, 2013 at 7:24 a.m.

NEW SMYRNA BEACH — Two new Internet cafes have opened in the city within the last year and, until recently, officials had been fielding one or two calls a week from people testing the waters to open more, said Kevin Jameson, a city planner.

“There certainly was interest,” Jameson said.

That interest may have dimmed in the wake of last week's multi-state investigation of Allied Veterans of the World, a St. Augustine-based charity that operated Internet cafes throughout Florida, including Volusia and Flagler counties. The expansive probe netted almost 60 arrests, mostly on charges of illegal gambling and money laundering, and led to the resignation of Florida Lt. Gov. Jennifer Carroll. Carroll used to provide public relations representation to the company before her election but has not been charged.

An Allied Veterans cafe on South Atlantic Avenue in New Smyrna Beach was among those raided last week.

While the Legislature and Gov. Rick Scott are on the precipice of approving an outright prohibition of Internet cafes, New Smyrna Beach officials could move ahead next week with limiting where the storefront operations, which offer electronic sweepstakes entries to customers, can be in the city.

Commissioners on Tuesday will consider allowing Internet cafes only in the city's highway service business districts or shopping center districts. While those zoning areas are where the seven cafes open in the city are located, the vote would be more about trying to halt a potential proliferation of the gaming operations in the future. Internet cafes are allowed in any retail area in the city — including the prime business districts on Flagler Avenue and Canal Street.

“As our current regulations are right now, we treat them as just a retail use because they are selling something and giving out these sweepstakes tickets,” Jameson said.

The tighter regulations the commission will consider would also include a provision that Internet cafes not be allowed to operate within 1,000 feet of each other, the same standard the city has on its books for bars and package stores. Two Internet cafes on South Dixie Freeway are right across the street from each other and wouldn't meet that standard, but Jameson said those businesses would be grandfathered and allowed to stay in business. However, those businesses could not expand their operations, he said.

The Senate gaming committee on Monday voted unanimously to pass a bill that would outlaw Internet cafes. Thursday, the House votes on a measure banning the types of machines used in the facilities. The bill (HB 155), clarifies that certain gaming devices used in the cafés are illegal.

“I am definitely worried about it,” said David Szabo, manager at Lucky Lady Sweepstakes on North Dixie Freeway. “We created this business to support our families. Myself, I think the ban is unfair.”

Szabo said his business shouldn't get a bad rap just because of the investigation into Allied Veterans of the World, which was accused of running a $290 million illegal gambling operation with most of the proceeds going into its owners' pockets.

“You don't throw out all the good apples just because of one bad apple,” Szabo said.

There were about a dozen people in the Lucky Lady around noon Wednesday. Employees at several other Internet cafes in the city declined comment about the potential prohibition. At the Sands Internet Cafe, a manager called police after spotting a News-Journal reporter snapping a photo from the sidewalk.

New Smyrna Beach City Commissioner Jason McGuirk in January favored issuing another moratorium on Internet cafes in the city. The commission instituted a six-month moratorium on the operations in August 2011 and then extended it for 90 days in January 2012. That moratorium expired in May 2012.

McGuirk said Wednesday he would support the city planning staff's recommendations on limiting where the businesses can locate, but believes an outright ban by the state is inevitable.

“I think the writing is on the wall on where the state is going to go with this,” McGuirk said.

<p>NEW SMYRNA BEACH &mdash; Two new Internet cafes have opened in the city within the last year and, until recently, officials had been fielding one or two calls a week from people testing the waters to open more, said Kevin Jameson, a city planner. </p><p> “There certainly was interest,” Jameson said. </p><p> That interest may have dimmed in the wake of last week's multi-state investigation of Allied Veterans of the World, a St. Augustine-based charity that operated Internet cafes throughout Florida, including Volusia and Flagler counties. The expansive probe netted almost 60 arrests, mostly on charges of illegal gambling and money laundering, and led to the resignation of Florida Lt. Gov. Jennifer Carroll. Carroll used to provide public relations representation to the company before her election but has not been charged. </p><p> An Allied Veterans cafe on South Atlantic Avenue in New Smyrna Beach was among those raided last week. </p><p> While the Legislature and Gov. Rick Scott are on the precipice of approving an outright prohibition of Internet cafes, New Smyrna Beach officials could move ahead next week with limiting where the storefront operations, which offer electronic sweepstakes entries to customers, can be in the city. </p><p> Commissioners on Tuesday will consider allowing Internet cafes only in the city's highway service business districts or shopping center districts. While those zoning areas are where the seven cafes open in the city are located, the vote would be more about trying to halt a potential proliferation of the gaming operations in the future. Internet cafes are allowed in any retail area in the city — including the prime business districts on Flagler Avenue and Canal Street. </p><p> “As our current regulations are right now, we treat them as just a retail use because they are selling something and giving out these sweepstakes tickets,” Jameson said. </p><p> The tighter regulations the commission will consider would also include a provision that Internet cafes not be allowed to operate within 1,000 feet of each other, the same standard the city has on its books for bars and package stores. Two Internet cafes on South Dixie Freeway are right across the street from each other and wouldn't meet that standard, but Jameson said those businesses would be grandfathered and allowed to stay in business. However, those businesses could not expand their operations, he said. </p><p> The Senate gaming committee on Monday voted unanimously to pass a bill that would outlaw Internet cafes. Thursday, the House votes on a measure banning the types of machines used in the facilities. The bill (HB 155), clarifies that certain gaming devices used in the cafés are illegal. </p><p> “I am definitely worried about it,” said David Szabo, manager at Lucky Lady Sweepstakes on North Dixie Freeway. “We created this business to support our families. Myself, I think the ban is unfair.” </p><p> Szabo said his business shouldn't get a bad rap just because of the investigation into Allied Veterans of the World, which was accused of running a $290 million illegal gambling operation with most of the proceeds going into its owners' pockets. </p><p> “You don't throw out all the good apples just because of one bad apple,” Szabo said. </p><p> There were about a dozen people in the Lucky Lady around noon Wednesday. Employees at several other Internet cafes in the city declined comment about the potential prohibition. At the Sands Internet Cafe, a manager called police after spotting a News-Journal reporter snapping a photo from the sidewalk.</p><p> New Smyrna Beach City Commissioner Jason McGuirk in January favored issuing another moratorium on Internet cafes in the city. The commission instituted a six-month moratorium on the operations in August 2011 and then extended it for 90 days in January 2012. That moratorium expired in May 2012. </p><p> McGuirk said Wednesday he would support the city planning staff's recommendations on limiting where the businesses can locate, but believes an outright ban by the state is inevitable. </p><p> “I think the writing is on the wall on where the state is going to go with this,” McGuirk said.</p><p><i> -- The Associated Press contributed to this report.</i></p>